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You may be in the market for a home loan or a business looking for a much-needed infusion of capital. You see the terms “mortgage broker” and “finance broker” used almost interchangeably within the industry. Which one of these would be best suited for your financial situation? Are there any differences between these two terms? Would borrowers pay more to a finance broker versus dealing with a mortgage broker? These are all good questions to ask yourself when seeking out a loan and we will cover the differences between these two types of brokers below.
Mortgage brokers are usually the first line of the financial world outside of your local bank in terms of getting a loan. These brokers have a network of lenders that deal primarily with borrowers looking for home loans and rental properties. This is a good first option to use when your borrowing needs in terms of property value aren’t that high in comparison to pricier homes or units. The financial requirements needed for these types of loans are also lower in terms of credit score minimums, down payment minimums, and income minimums. That all being said, the mortgage broker typically works with a wide network of different lenders that can offer loans for a variety of financial backgrounds.
The most succinct way to describe a finance broker is that they’re a mortgage broker on steroids. A Brisbane finance brokerage does everything that a mortgage brokerage does but on a much higher scale. Finance brokers have a larger network of lenders to use and they typically deal with higher amounts of capital needed for loans. To think of the differences in American terms, think of the difference between a local real estate company and a large capital asset management company.
Finance brokers facilitate loans between high-end lenders and borrowers who need large amounts of capital. The range of borrowers fall between those looking to purchase a large house or mansion, those seeking to buy a large apartment dwelling, and businesses looking to borrow money for an upgrade to their business. The stakes are much higher for finance brokers as not only the capital borrowed increases, but the commissions paid out to finance brokers reflect this change in money borrowed. Finance brokers make more money on average than a mortgage broker does.
The breadth of the services offered by a finance broker extend to financial services to the borrower. The broker can devise a financial plan for the borrower to make their money last through strategic ways such as investments, retirement plans, real estate investments (rental properties), saving plans, and other methods. This ability to offer more services to the borrower separates a finance broker from a mortgage broker.
Stock Market Investments
Tied in with the investing part of the equation, finance brokers also purchase and sell stocks in stock exchanges on behalf of their clients. The daily grind of the stock market is akin to a giant roller coaster as the market spikes and falls throughout the day. This can be a high-pressure environment and finance brokers are trained to operate within this pressure cooker to get the best ROI (Return On Investment) for their clients on a daily basis.
Watchful Eyes On Your Investment
Finance brokers could be considered “big brother” when it comes to money as they are constantly keeping watch over your investments. You can’t keep your eyes on your ledger on a constant basis while you’re living your life and working your job to bring home your pay. Finance brokers do this on your behalf throughout the day to make sure that your investments garner a good return and increase your holdings.
The Final Word
Mortgage brokers are adequate if your needs are minimal and are looking to just get a loan for a house. But if you’re looking to expand your vision and look to improve your financial standing long-term, employing the services of a finance broker is a good move. You should always remember that it’s in the finance broker’s best interests to do right by your investments. The more money you make on your investments, the more money that the finance broker makes as well in the form of commissions.